Think you know what’s going on geographically in your portfolio?
At Pinnacle, we have found most insurers don’t.
By not updating or re-thinking their territories, too many insurers are incorrectly pricing risks and overlooking competitive opportunities.
But it doesn’t have to be that way. Thanks to the emergence of multi-variate analysis, and through the use of clustering and smoothing, Pinnacle can help insurers develop state-of-the-art rating territories.
We work with clients to develop the most appropriate theoretical territorial set, adjust these sets for real life constraints and review the impact upon the insurer’s existing portfolio. Pinnacle can also make further adjustments based upon desired maximum rate swing constraints and provide rate filing support.
This analysis combines Pinnacle’s expert actuaries with Summit®, our territorial software. Using an insurer’s experience by product, state, line of business, coverage/peril and location, Pinnacle applies smoothing and clustering techniques to develop the insurer’s indicated territorial definitions. These definitions can be developed in the typical contiguous fashion or on a non-contiguous basis.
When combined with the power of a multivariate analysis, our process develops the “true” geographic loss cost differences that can be used to determine appropriate territorial boundaries.
For insurers whose data is too sparse to have full credibility, Pinnacle can help by supplementing their data with additional experience in most states.
For more information about Pinnacle’s territorial analysis services or Summit®,
contact Chris Carlson by writing ccarlson@pinnacleactuaries.com or
calling (614) 734-8366.
Learn more about Summit®.
Learn more about territorial definitions in our recent monograph. (
PDF, 1.6 MB)
